ISLAMABAD: Pakistan State Oil (PSO) has reportedly been directed to make arrangements for supply of 15000 MT/ day for thermal power plants from May to September 2018, official sources told Business Recorder.

Based on an analysis of demand and associated generation, delayed COD of RNLG plants, delayed COD of new hydel generation plants, and scheduled outages of existing power plants, the operation of RFO based power plants will be required to meet the demand (peak and off peak).

From May 2018 onward till September, 2018, RFO plants will be activated to maintain generation subject to required system demand. Accordingly, fuel oil required from May 2018 to September 2018 will be approximately 15,000 MT/day during the current summer season, excluding supply from local refineries.

This demand will materialize if Muzzafargarh and Jamshoro thermal power plant will be run on RLNG for which necessary regulatory authorizations are being finalised.

The sources said, on June 6, 2015, the ECC had decided that PSO may import petrol and Light Sulphur Furnace Oil (LSFO) on the basis of C&F and import of High Sulphur Furnace Oil (HSFO) will continue to be imported on FOB basis through PNSC.

However, in pursuance of the decision taken in a meeting of Cabinet Committee on Energy (CCoE), on December 28, 2017 under the chairmanship of the Prime Minister it was decided to discontinue import of Furnace Oil (FO) with immediate effect.

Subsequently, Power Division argued that country wide stocks of FO were at a critical level which needed to be built up urgently and requested procurement of FO on immediate basis so that demand supply gap of power sector could be minimized, especially during the ensuing summer season.

The matter was considered by the CCoE in its meeting held on April 2, 2018. CCoE approved import of FO corresponding to demand of 18,000 MTs/day as placed by Power Division for the period from April to September 2018.

The sources further stated that PSO has floated FOB tender for supply of FO on April 5, 2018. Since PSO has to follow PPRA Rules, which would require a minimum tendering time of around 60 days, the first cargo is scheduled for arrival in early June, 2018. However, in view of urgent demand of Power Division and to avoid any untoward situation during the summer including the month of Ramazan, it was decided that PSO may also go for Gallop Tendering on C&F basis. Accordingly, PSO published a Gallop Tender on April 10, 2018 to procure 420,000 MTs (6 cargoes) of Furnace Oil on C&F basis while the delivery period of the 6 cargoes will be from 3rd May, 2018 to 25th May, 2018. It was revealed that the stock of FO in the country as on April 15, 2018 was around 335,000 MTs (including 100,000 MTs with PSO, 180,000 MTs with Power Plants and 45,000 MTs with Refineries.

According to sources, Power Division indicated that the power sector would require FO of 16,000-21000 MTs/day to run power plants. However, as per latest data, actual demand of FO for Power Sector would be 15,000 MTs/day MTs/day, therefore, PSO may be allowed to import FO on C&F basis through Gallop Tender as a special case. The remaining demand of FO would, however, be arranged on FOB contract basis through PNSC as per usual practice. The Prime Minister directed the Petroleum Division to decide the quantity of FO import in consultation with Power Division which has requested supply of 15000 MT/ day to power plants from May to September.—MUSHTAQ GHUMMAN